Choosing the type of eCommerce store should be your first priority when you decide to start an online business. There are several types of online stores, and since online purchases increased due to the Covid-19, entrepreneurs are drawn to this model of business more than ever.
Shopify is the common choice for eCommerce owners just because of its easy-to-use interface and many useful apps like helpcenterapp.com that will improve your user experience.
In today’s article, we will focus on dropshipping. Dropshipping is a business model that acts as a link to manufacturers of products and buyers. This model has been around for many years, and many people want to know if dropshipping is still profitable.
In short, yes. It is still profitable, but it depends on the type of business you choose. Further in the text, we will compare niche vs. general store and find out the advantages and disadvantages of each model.
Niche Dropshipping Store
Niche dropshipping store is an eCommerce business model that focuses on a certain type of products, rather than having a huge palette of different categories. For example, it can be based on NFL gloves rather than featuring all NFL products.
Pros of Niche Stores
• Easier to rank
After you’ve started your eCommerce store, your goal should be to rank higher in search results. When it comes to niche stores, they have an advantage over the general store just because they are more specific about a certain category of products.
• Get more specific traffic
Even though the traffic on your website is important, it should not be your goal. For example, you can get 1000 visitors per day and two purchases, or you can get 50 visitors per day with ten purchases. Niche dropshipping stores allow you to receive more specific traffic that is interested in your niche.
• Convert Buyers More Easily
This is where your target audience comes into action. If you catch someone’s attention with an ad about men’s watches, they’ll be most interested in this category, despite your huge collection of products from different categories. This means that if you attract someone to your website, you’ll be more likely to convert them into buyers if you have a niche store.
Cons of Niche Stores
• Not Quite the Business Model for Beginners
Niche stores require a lot of research and experience in choosing winning products. Additionally, they don’t know what kind of products perform well on the market.
• Requires a Lot of Trial & Error
Even the most experienced people cannot determine what product is going to get huge amounts of sales. Niche stores are mostly built on trial & error, which involves a ton of work.
General Dropshipping Store
General dropshipping store is a business model that allows you to add many different categories of products to your portfolio.
Pros of General Store
• Easier to Start
Just because general stores don’t require a lot of research and focusing on a single niche, they are much more flexible to start. All you need is a list of trending products and find a way to incorporate them into your website.
• Broader Audience
By having more product categories, you’ll reach more people. This means that you’ll have more potential customers if you develop the right marketing strategy.
With a general store, you can go for a couple of different niches at the same time. This will enable you to find out which categories of products perform better than others.
Cons of General Store
• Order Conversion Is Much Lower
Just as we mentioned before, if you attract someone to your website using a certain product, the chances are that they’ll be most interested in that specific product and not browse your categories. This will bring down the conversion rate.
There are many ways you can improve your conversion rate, but it will still be lower than a niche store.
• More Irrelevant Traffic
Getting a lot of traffic should not make you happy. You have to see what percentage of that traffic actually buys something from your store. With a general store, you can expect a lot of traffic but very few purchases.
• Fierce Competition
It is much easier to outperform five competitors within a certain niche than go against 1000 general stores. With a general store, you’ll get more competitors, which could be devastating for your business model.
If you are just starting with Dropshipping, it is a good idea to go for a general store for a couple of months until you find the right niche for you.
After that, you should transform your website or build a new one targeting that niche.